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Proof that investment bankers at RBS are massively underpaid (vs. their peers)

RBS Global Banking and Markets gets a particularly good deal from its investment bankers.

Our analysis shows that on a profit-per-head basis, RBS's investment bankers are some of the most profit-generative around. They are also some of the worst paid.

In the first quarter, for example, profit per head at RBS GBM was 59k ($96k). At Goldman Sachs it was $76k. At JPMorgan it was $89k.

Only Deutsche Bank's investment bankers generated more in profit than RBS's ($212k), but Deutsche's figures are notoriously unreliable because back office staff are not included in headcount figures for its securities business; per-head figures at DB are always inflated as a result.

This leaves RBS investment bankers looking very under-appreciated. In the first quarter, average pay per head at RBS GBM was just 45k ($75k). At Goldman, it was $147k and at JPMorgan it was $124k.

RBS bankers clearly have reason to be paid more. Or they have reason to get hired by JPMorgan or Goldman Sachs.

League table of investment bank profitability (and pay) per head, Q11

1) Deutsche Bank (Corporate and Investment Bank)

Profit per head: $212k

Pay per head: $187k

2) RBS (Global Banking and Markets)

Profit per head: $96k

Pay per head: $74k

3) JPMorgan (Investment Bank)

Profit per head: $89k

Pay per head: $124k

4) Goldman Sachs

Profit per head: $77k

Pay per head: $148k

5) Credit Suisse (Investment Bank)

Profit per head: $74k

Pay per head: $133k

6) UBS (Investment Bank)

Profit per head: $54k

Pay per head: $121k

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AUTHORSarah Butcher Global Editor
  • Mi
    Michael
    19 May 2011

    They should close down RBS for good. It is wrong on many levels- it is beyond help. Many have left without waiting for another job to go to. That is how desperate become when they join that jungle. Their policy is that mgmt will support you but if your new comer, your on your own. Your mistakes are your own. Mgmt wont back you up.

  • An
    Ank
    17 May 2011

    Some of the comments are so dumb!!!

    The article clearly says profit per head...which means that number is after taking into account all costs for the investment banking division (including the pay of the bankers). I would say the numbers are decent for each bank, although there is a lot of variation and the banks at the bottom of the pile can do better.

  • ms
    mspgrandi
    11 May 2011

    Althought produced wth the correct methodology, and theoretically an interesting ratio to know (profit/per head).... given the unreliability of Investement banking quarterly report these ratios actually mean nothing.

    Quarterly result are currently so much influenced by one-off writedowns or write ups that trying to make a meaningful comparison is almost impossible

  • Mi
    Mike
    11 May 2011

    If they paid them more, the profit per head would drop accordingly.

    i.e. They don't bring in as much revenue per head as JPM / Goldmans, but RBS makes more profit by paying them less.

  • Za
    Zarina
    11 May 2011

    The Pay per head in this article is it yearly or quarterly? It seems too high to be quarterly and too low to be yearly. In any case RBS has to generate revenue for lavish excesses such as royal weddings etc. so it has to cut corners somewhere.

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